Protect Software And After Spending A Few Days Researching Different?

I am thinking about ways to protect software and after spending a few days researching different ways such as using instalShield, etc. i was wondering how would you go about creating your own license server.

Would it be having a part of your install procedure writing a registry file to state if it was first time used. Then from there on first load having the user enter in the information such as (Name, Organization and serial number), then the software connect to the website or server hosting the database and then have the serial number and details checked against it if not in add to the database with the MAC Address and other unique code form system ('Unsure what') and then return true which would then allow to open the software, if already present check how many times it is present through RowCount if more than say 3 to allow change of systems or upgrades then return false and return msg and stop the system.

Is this the basic princaple of it and how difficult would it be to create? is it just like preforming an SQL query against a database or would there be alot more as part of it?what could be the possible loop holes it? would it also be benificial to check the details are correct silently say every 30days to ensure that it is not copied software?